Analysis of Singtel Last 13 Years

Huh? “One of the most successful Singapore CEO ?” Is the Chairman of Singtel blind? At least do what the SPH Chairman said about Alan Chan. Don’t praise performance and people can read between the lines. 

Ms Chua and key management basically treaded water and tried to keep cashflow and profits. They failed to grow anything significant for shareholders. At best they are an average team and definitely no where near “most successful”.

Here’s a quick analysis on Ms Chua performance as CEO of one of our Temasek crown jewel. This is another example of why Temasek needs to become an active investor for our GLCs and broaden the talent pool for CXOs. 

1) Financials. 

Compare FY 2007 with FY 2019. I use 2019 as it removes effect on covid and 2007 as that’s the CEO appt year. Though arguably if they transformed well, COVID should have helped or be neutral.

Revenue grow from 14.84b to 17.37b. That’s 17% growth over 13 years. Not even matching inflation. You raise prices annually to follow inflation also make the same!

Net profit shrank from 3.681b to 3.095b. Think no need to say anything here.

2) Valuation and Returns 

Yes they managed to maintain dividends. Hurrah for them! But that’s a really low bar.

Market cap in 2007 was 62b, end 2019 is 59b. They have around 4.5% dividend annually paid out. So return to shareholders to end 2019 is probably 4-4.5%. Is this great?  Average at best to me.

Take note covid has shown they failed to transform, stock price has dropped 40% this year and their market cap is now 35b.

3) Execution & Strategy

Their internet foray is a disaster. See all the internet businesses they buy/build and close down. Consumer brand has been lackluster. I don’t even see any catalyst except for stakes in India, Indonesia and ph telco. 

Verdict? You tell me if this is best of class. I think it’s at best average and that’s being kind.

I truly hope the new CEO is cut from a different cloth and the board pushes the entire company to truly transform and perform. 

NB: by the way.. vested and lost over 100k on this stock so far this year. Bought cheap already but cheap can get cheaper. I think I may sell if new CEO don’t announce sweeping moves. Can’t imagine the poor people who bought end of last year.